1. In this report we have shown that the proteolipid protein gene contains a potential thyroid hormone response element consisting of a direct repeat separated by two nucleotides. It, however, can only be activated by thyroid hormone receptor beta in the presence of thyroid hormone and peroxisome proliferator activated receptor. Thyroid hormone receptor alpha is ineffective. The critical region of thyroid hormone receptor beta consists of three amino acids at positions 143 - 145 in the distal box of the DNA binding domain. This study shows that the two thyroid hormone receptors can regulate a different set of target genes by selective heterodimer formation recognizing specific thyroid hormone response elements. 2. Using a gel shift mobility and DNase I footprinting assays we identified a novel thyroid hormone response element in the Simian Virus 40 late promoter at the major late transcription start site. This thyroid hormone response element when placed upstream of the thymidine kinase promoter functions as a positive regulatory element in a strictly thyroid hormone and thyroid hormone receptor dependent fashion. However, there is a difference between whether this thyroid hormone response element is in cis or trans to thymidine kinase promoter. In cis, this element acts as a thyroid hormone dependent enhancer. By contrast, when this element is a part of the Simian Virus 40 late promoter, trans to the thymidine kinase promoter, it acts as a thyroid hormone and a receptor dependent inhibitor of thymidine kinase promoter activity. 3. We have identified certain proteins in a rat brain and liver nuclear extracts that can interact differentially with the thyroid hormone receptor depending on the structure of thyroid hormone response elements and the receptor isoform (` or s). Their distinct developmental and tissue specific patterns of expression most likely contribute to the tissue- and development-specific regulation of genes responsive to thyroid hormones. Cloning of these factors is underway in order to support this hypothesis.